Ashland distillery on the rocks

Cash-poor Organic Nation, a producer of vodka and gin, has shut down after a four-year run

ASHLAND — Awards were never the hard part for Organic Nation.

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By GREG STILES

MailTribune.com

By GREG STILES

Posted Jan. 24, 2014 at 12:01 AM
Updated Jan 24, 2014 at 9:18 AM

By GREG STILES

Posted Jan. 24, 2014 at 12:01 AM
Updated Jan 24, 2014 at 9:18 AM

» Social News

ASHLAND — Awards were never the hard part for Organic Nation.

Just last week, the local distillery bagged yet another Good Food award in San Francisco.

There was no doubt the niche gin and vodka distillery had a local following. Problem was, Organic Nation needed more of a national following to survive.

The last of Organic Nation's spirits have been distilled, every ounce has been sold, and the still is headed for another home.

"If we were in Portland, we wouldn't be having this conversation," said Diane Paulson, who along with her husband, David, launched the company in 2007. "We wouldn't be going out of business, but we're isolated. People ask me how New Deal Distillery is making it in Portland and we aren't. The difference is they have a million people and Ashland is 20,000." (Correction: See below)

The bars and restaurants, such as Peerless, Black Sheep and Brothers, were more than happy to put Organic Nation on the menu.

"Some people told me that's all they drank," Paulson said. "There just weren't enough of them."

Born in the unhappy recessionary days of 2007, Organic Nation stepped to the plate with one strike against it.

"We started right in the middle of the worst recession most of us will live through," she said. "We were under-funded, starting with money from family and friends, and it was never enough. We were always riding so close to the red or black line. When you are there, you can't make mistakes and when you're starting, you will make mistakes."

The mistakes, however, weren't in the bottle. Organic Nation scored right from the beginning, collecting a silver medal in the 2009 San Francisco World Spirits Competition, and more followed.

"We have a good reputation and a great product," Paulson said. "There was never a dispute about how good the product is."

Yet, the one component, the inescapable element needed to assure long-term success, eluded the Paulsons.

"It was just the lack of funds," she said.

Whether it was convincing a well-heeled businessman or appearing before angel investors, Paulson couldn't connect.

"I bumped into wealthy people and told them about our product and they would say, 'I've done software, but I don't know about a new industry,' " she said. "Wineries went through this in the '70s and micro-breweries in the '80s. This was just starting to catch on."

The targeted investment audience wasn't easy to convince, said market strategist Chris Cook of Capiche, and a member of Organic Nation's advisory board.

"It's a real shame because Organic Nation had a growing following and they had markets opening up, both within the U.S. and internationally," Cook said. "But without the capital to do the marketing, it was all for naught."

Cook suggested local investors the Paulsons hoped to attract weren't necessarily the right fit.

"By the time we were reaching out more on a national and international scale, it was too late," Cook said. "Because these kind of deals don't happen overnight."

An uptick in distribution opportunities came along last March, followed by an all-out push in April.

"We were trying to find a creative thinker who was outside the box, and could make it happen," Cook said.

The reality was that Organic Nation had no answer for multimillion-dollar marketing budgets by the makers of Grey Goose and other spirits.

"Bars are used to having someone come in and order a martini with Grey Goose," Paulson said. "We had no way to educate them about our product, no way to give them a clue that we're on the shelf."

Organic Nation sold about 600, 12-bottle cases annually, with its gin and vodka retailing for about $28 to $30 per bottle.

"I didn't think we would be competing against corporate distillers, but we were," she said. "We had a great run. David and I met a ton of wonderful people. We had a good ride, but we're very sad."

Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter @GregMTBusiness, friend him on Facebook and read his blog at www.mailtribune.com/Economic Edge.

Correction: The company's launch date has been corrected in this version.